This week brings very exciting energy news from India. The state of Andhra Pradesh, with its IT hub, Hyderabad, and a population more than double that of California, has announced that it soon will adopt a statewide Energy Conservation Building Code (“ECBC”). By adopting this code, Andhra Pradesh is enabling cost-cutting and energy saving buildings that will increase electricity reliability, reduce local air pollution, and combat global climate change.

Under the code, new commercial and public buildings with a plot area of 1000 m2 or a built up area of 2000 m2, including office buildings, hospitals, IT parks, and high-rise residential complexes, will be designed and constructed to meet new minimum energy efficiency standards. The new standards apply to the following areas:

building envelope – improving insulation and design of roofs, walls, windows and doors so that less conditioned air is lost, as well as treating roofs to absorb less of the sun’s heat;

heating, air conditioning, and ventilation systems – improving the efficiency of these mechanical systems so that they use less energy to provide the same interior comfort levels;

water heaters – using solar water heating to supply hot water;

lighting – using more efficient lighting such as CFL and LED bulbs instead of incandescent lights, equipping rooms with occupancy sensors to automatically turn off lights when not in use, and using directional or task lighting and other design strategies to reduce the amount of artificial light needed; and

electrical systems and motors – reducing permissible electricity losses in building electrical systems and improving the efficiency of motors and other equipment.

Perhaps the most innovative feature of the code is that it allows for some flexibility in compliance. The code allows either a “Prescriptive Method” – which lists requirements for energy efficiency measures – or a “Whole Building Performance Method” – which entails using design software to optimize building energy performance while minimizing cost. This flexibility will allow developers, architects, and designers to respond to changing technologies and prices over time, easing compliance with the code. Buildings will be star rated (single star to five star) based on the level of energy savings. To ensure effective compliance with the building code, Andhra Pradesh proposes to empanel technical agencies and architecture firms for independent certification and validation. Further, Andhra Pradesh has sought the support of institutions such as the Administrative Staff College of India (ASCI), the Indian Institutes of Information Technology (IIIT), and NRDC for addressing the capacity building needed for code implementation.

Improving the energy efficiency of India’s buildings is critically important and presents a huge opportunity for developers, investors, building occupants, and the nation as a whole. Today’s buildings use one third of India’s electricity, yet the number of buildings will triple by 2030. India is already the fourth largest energy consumer in the world, and to continue its economic growth through 2032 India will need to increase its electricity generating capacity about six times. However, to meet these energy needs India relies too much on coal, at great environmental, financial, and security costs.

This is where the opportunity arises: improving building energy efficiency is extremely valuable and pays for itself. One McKinsey report calls it “the single largest opportunity identified in our research” and estimated the potential value at $696 billion. Another found that improving energy efficiency in India would save more money than the annual government spending on health care and education combined. And NRDC and its partners have proved exactly how well this can work in our case study of the energy efficiency retrofit of a high-rise office building in Mumbai. Today’s news from Andhra Pradesh is further evidence that India recognizes the seemingly-too-good-to-be-true nature of energy efficiency improvements. The ECBC will result in buildings that are as much as 60 percent more energy efficient than buildings compliant with the old code. That energy saved is money saved, not to mention the benefits for our climate and environment.

NRDC President Frances Beinecke recently sent a letter to U.S. Secretary of State John Kerry highlighting three climate-related priorities for the U.S.-India Strategic Dialogue including accelerating energy efficiency standards for buildings that will help India meet the increasing energy demand, improve energy security, and fight climate change.

Implementation of the code in Andhra Pradesh will still require a good deal of work. Responsibility for enforcement of building codes falls to local government bodies in India, just as it does in the United States, and both the construction industry and those local agencies must have the technical knowledge, procedures, and controls in place to make the potential energy efficiency gains a reality. However, today’s announcement is an important next step as India works to improve its energy picture. We look forward to further progress in Andhra Pradesh and in other states toward a sustainable energy future.